SINGAPORE - The initiatives in Singapore's latest Budget will help keep the worst-hit firms afloat while supporting others in transforming and expanding, said experts at a roundtable discussion organised by The Straits Times and UOB on Wednesday (Feb 17).
They underlined that such initiatives are especially important as government resources are finite and will have to move towards helping growing firms to innovate and stay competitive.
They also noted that as the Jobs Support Scheme (JSS) tapers off, the Budget announced on Tuesday has introduced new measures to help businesses grow rather than return to the status quo.
Mr Douglas Foo, president of the Singapore Manufacturing Federation and vice-chairman of the Singapore Business Federation, said at the event: "The Budget is able to target the short-term challenges that enterprises are facing, so it's very focused on some of those groups that are heavily impacted, like aviation and tourism, and at the same time... there are also initiatives helping those on the rebound to do even better, and to innovate and transform for the challenges and the opportunities going forward."
He added that businesses have been grateful for the help given, but also recognise that they cannot be buoyed indefinitely by government support.
"They are not under an illusion that this is going to be a forever thing, because it comes with a cost," he said.
"It was very clear that the Budget was targeted to assist those that are heavily impacted so that they can face those challenges.
"And now, the impetus is on enterprises and the workforce to transform going forward."
Professor Hoon Hian Teck, dean of Singapore Management University's School of Economics and a Nominated MP, agreed that the Budget showed that attention has turned quickly to structural transformation, so that when the storm has passed, there will be good jobs that offer good pay to workers.
"It's about innovation, for which you've got to reach the international market. It is about financing start-ups and giving support to our successful local enterprises with the idea of equity financing with (investment firm) Temasek to let them reach a wider market."
Prof Hoon added that there is also the point that "creative destruction" has to take place, where firms automatically move to areas with potential to grow.
"Maybe they will reinvent themselves within the same sector, but you want to allow some of them perhaps to move out of, say, the tourism sector to others."
Mr Desmond Choo, a labour MP and an assistant secretary-general of the National Trades Union Congress, said that with these shifts - such as retail moving towards e-commerce - Singapore needs a good system that allows workers to be retrained and redeployed.
"That is the capability that we must invest resources to build, because it's not only for this crisis... The structural changes are coming fast and furious."
Mr Foo agreed that job seekers have to be reskilled to fill vacancies that might not be taken up due to skill mismatches.
Even the Industry Transformation Maps that were introduced five years ago to guide sectors in their future trajectories have to transform because of the pandemic, he added.
"Through that, the enterprises are also transforming, the workforce is transforming, and the nation is actually transforming. So all parts are now moving together."
UOB economist Barnabas Gan said the shift towards supporting growth is vital and part of a delicate balance since resources are finite.
"There's a balance that we have to understand, that we are here for the long haul and we have to budget the amount of resources that we have so that Singapore is well positioned to carry through."
He said over-reliance on government support in the long run will make firms less competitive, which is why the JSS has to taper off.
Prof Hoon noted that growth areas that should be nurtured and supported include advanced manufacturing, urban design and the digitalisation of the service economy.
"Advanced manufacturing, in particular, draws upon a talent pool that's not going to (revert to) manufacturing like in the 1960s.
"It's not going to be labour-intensive, with textile, garments and so on. There is a place in advanced manufacturing where there is potential for growth," he said.
"So I think that if we keep our eyes on these broad directions, the hope is that these become the areas in which you have new firm creation because that's always been the process of growth. There are some firms that are destroyed but there are new opportunities."
The Straits Times and UOB roundtable discussion
Two economists, a business chamber leader and a labour MP gave their views on the Budget at the roundtable event on Wednesday.
The hour-long discussion in the ST newsroom saw the panellists discuss how the new Budget initiatives can help speed up Singapore’s recovery from the Covid-19 crisis, what measures can propel economic transformation and what can be done to support workers, among other issues.
• Mr Barnabas Gan, economist at UOB
• Professor Hoon Hian Teck, dean of Singapore Management University’s School of Economics and a Nominated MP
• Mr Desmond Choo, an MP for Tampines GRC and assistant secretary-general of NTUC
• Mr Douglas Foo, president of the Singapore Manufacturing Federation and vice-chairman of the Singapore Business Federation
• Mr Vikram Khanna, associate editor at The Straits Times